How States Use Federal and State Funds Under the TANF Block Grant. A key feature of the 1. Temporary Assistance for Needy Families (TANF) block grant. Prior to the TANF block grant, families in need received cash assistance through the Aid to Families with Dependent Children (AFDC) program, under which federal funds matched half or more of every dollar of cash assistance that a state provided to a needy family. A key argument for block granting was that states needed much greater flexibility over the use of the federal funds than AFDC’s funding structure provided. Under a block grant, proponents argued, states could shift the funds freed up when families left welfare for work to child care or other work supports, where need would increase. States also could invest more in work programs to reflect the increased emphasis on welfare as temporary and work- focused. That is not what happened. In TANF’s early years, when the economy was strong and cash assistance caseloads were shrinking, states used the flexibility of the block grant to take some of the funds that had gone as benefits to families and redirect them to child care and welfare- to- work programs to further welfare reform efforts. But over time, states redirected a substantial portion of their state and federal TANF funds to other purposes, to fill state budget holes, and in some cases to substitute for existing state spending. Even when need increased during the Great Recession, states were often unable to bring the funds back to core welfare reform services and instead made cuts in basic assistance, child care, and work programs. Thus, the cash assistance safety net for the nation’s poorest families with children has weakened significantly under the TANF block grant, with potentially devastating long- term consequences for children growing up in families with little or no cash income to meet basic needs. And, despite the rhetoric, few of the diverted resources have gone to work preparation or employment for the families. In their recent book, $2 a Day, authors Kathryn Edin and Luke Shaefer present a disheartening account of the human impact of states’ failure to provide a safety net for families that lose a job or are unable to find work. Instead of the success that some claim welfare reform to be, a close examination of states’ use of funds under TANF provides a cautionary tale about the dangers of block- granting core safety- net programs and providing extensive flexibility to states on using the funds. Currently, states spend only slightly more than one- quarter of their combined federal TANF funds and the state funds they must spend to meet TANF’s “maintenance of effort” (MOE) requirement on basic assistance to meet the essential needs of families with children, and just another quarter on child care for low- income families and on activities to connect TANF families to work. They spend the rest of the funding on other types of services, including programs not aimed at improving employment opportunities for poor families (see Figure 1). TANF does not require states to report on whom they serve with the federal or state funds they shift from cash assistance to other uses, let alone what outcomes they achieved. Thus, there is no evidence that giving states this broad flexibility has improved outcomes for poor families with children. This report examines 2. TANF/MOE funds are used; fact sheets and the underlying spreadsheet that CBPP issued separately provide state- by- state information.[1] (See Box 1 for more detail about this analysis.) The report’s key findings include: The share of state and federal TANF spending used for basic assistance (cash welfare grants) has fallen significantly. At TANF’s onset, 7. TANF and state MOE funds went for basic assistance for poor families. By 2. There is significant variation across states; ten states spent less than 1.
How States Use Federal and State Funds Under the TANF Block Grant.
TANF/MOE funds on basic assistance in 2. States spend only about a quarter of their state and federal TANF dollars on child care and work activities combined.
A key justification for block- granting TANF was to give states flexibility to move funding from cash assistance to work- related activities and/or supports (such as child care subsidies). States raised spending in these areas in TANF’s early years but didn’t sustain those modest increases. States used only 8 percent of their TANF and MOE funds for work activities in 2. States spent 1. 6 percent of total TANF and MOE funds on child care; 1. Core welfare reform activities thus represent just half of state and federal TANF spending. Child care, work activities, and basic assistance combined totaled 5. TANF and MOE spending nationally in 2. The share varied widely across states: eight states spent less than 2.
12.16.15 summary: consolidated appropriations act of 2016. summary: consolidated appropriations act of 2016. washington, d.c.— today, u.s. senator barbara a. I Fiscal Year 2015 Budget. Summary and Background Information. TABLE OF CONTENTS. Page. I. SUMMARY OF THE 2015 BUDGET. The 2016 House Democratic Budget: Economic Opportunity for Americans Working Hard to Get Ahead. The Joint Select Committee on Deficit Reduction, colloquially referred to as the Supercommittee, was a joint select committee of the United States Congress, created. Statistical Programs of the United States Government: Fiscal Year 2014 outlines the funding proposed for Federal statistical activities in the President’s Budget.
States use a large and growing share of state and federal TANF funds that formerly helped poor families meet their basic needs for other state services. In some cases, states have used TANF and MOE funds to expand programs, such as state Earned Income Tax Credits (EITCs) or pre- K, or to cover the growing costs of existing services, such as child welfare. In other cases, they have used TANF/MOE funds to replace existing state funds, thereby freeing those state funds for purposes unrelated to providing a safety net or work opportunities for low- income families.
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The extent to which states have used TANF or MOE funds for areas beyond the core welfare reform areas raises serious concerns. TANF’s combination of broadly defined purposes and limited accountability for much of its spending has enabled states to divert funds from supporting the poorest families and use them instead to help fill state budget holes. In addition, the annual federal TANF block grant has no adjustment for inflation and thus has eroded badly over time, losing one- third of its value since 1. These two factors — the funds’ diminished value and broadened dispersal — have left states with fewer resources to serve needy families, especially at times of increased need, as the Great Recession and its aftermath showed. Block grants can weaken accountability and oversight, leading states to spend significant federal funds in ways that Congress did not intend. For many states, the TANF block grant has led to a severe erosion of the cash assistance safety net and very limited fulfillment of the promise that the funds saved would support work. Box 1: Methodology Used to Analyze TANF and MOE Spending Data. States have broad flexibility in how they spend federal and state TANF dollars for activities that meet any of TANF’s four purposes.
They are required to report quarterly and annually on how much they have spent and for what purposes; the data cited here on states’ use of TANF funds come from these reports. Each state reports how much TANF or MOE spending occurred during the reporting period in each of 2.
ACF Form 1. 96 (the form states must submit to HHS). We combine these 2. See Appendix II for details.)basic assistance; work- related activities and supports; child care (including transfers to the Child Care and Development Fund); administration and systems; refundable tax credits for low- income working families; other areas, which includes: nonrecurring short- term benefits, generally for emergency needs; pregnancy prevention and two- parent family formation and maintenance; transfers to the Social Services Block Grant; spending categorized as “authorized under prior law”; and“other nonassistance.”States also must identify the specific funding source for each expenditure subcategory. If the state used federal funds, it must identify whether they were from the regular TANF block grant or other TANF sources (e. Contingency Fund or TANF Emergency Fund). If the state used MOE funds, it must identify whether they went to a program that also received federal TANF funds or to a separate state program that did not receive TANF funds. Our analysis uses the term “federal TANF dollars” to include expenditures from the TANF block grant plus any additional federal funds received through the TANF Contingency Fund, TANF Emergency Fund, or TANF Supplemental Grants, which 1. See Appendix I for details on the various TANF- related federal funding streams.) Our analysis also combines each state’s MOE expenditure data (rather than separating out expenditures for individual state programs). Finally, we generally combine TANF and MOE spending data rather than focus on whether the funds used for a particular purpose were TANF funds or MOE funds. Background. The TANF block grant fundamentally altered both the structure and the allowable uses of federal and state dollars previously spent on AFDC and related programs.[2] Under TANF, the federal government gives states a fixed block grant totaling $1.
States that meet specified criteria may also qualify for federal “Contingency Funds”; roughly 2. Under the federal TANF law’s MOE requirement, states must maintain a certain level of state spending, based on a state’s spending for AFDC and related programs prior to TANF’s creation in 1.
States are required to maintain 8. In 2. 01. 4, states spent $3. TANF and state MOE funds, comprising $1. TANF funds and $1. MOE funds.[3] States can use their federal TANF dollars and state MOE funds to support a broad range of activities related to promoting the four purposes of TANF specified in federal law: (1) assisting needy families so children can be cared for in their own homes or the homes of relatives; (2) reducing the dependency of needy parents by promoting job preparation, work, and marriage; (3) preventing out- of- wedlock pregnancies; and (4) encouraging the formation and maintenance of two- parent families.[4]Reduced Spending on Basic Assistance Has Weakened Safety Net.
States spent $8. 4 billion of federal TANF and state MOE funds on basic assistance for poor families in 2. TANF and MOE funds spent that year. By contrast, at TANF’s onset, states spent $1.